ROI CASE STUDY SALESFORCE.COM DR PEPPER SNAPPLE

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September 2009
Document
J66
ROI CASE STUDY
SALESFORCE.COM
DR PEPPER SNAPPLE GROUP
THE BOTTOM LINE
Dr Pepper Snapple Group deployed Salesforce.com to replace an aging
contact management system and custom spreadsheets, dramatically
increasing management and sales productivity and providing greater
visibility for strategic decision making.
ROI: 56%
Payback: 2.3 years
Average annual benefit: $327,632
THE COMPANY
Dr Pepper Snapple Group is a leading producer of flavored beverages in North
America and the Caribbean. The company manufactures, markets, and distributes
more than 50 brands of carbonated soft drinks, juices, ready-to-drink teas, mixers,
and other premium beverages across the United States, Canada, Mexico, and the
Caribbean. Based in Plano, Texas, the group’s brands include Dr Pepper, Snapple,
Sunkist, 7UP, A&W, Canada Dry, Crush, Mott’s Squirt, Hawaiian Punch, Penafiel,
Clamato, Schweppes, Venom Energy, Rose’s, and Mr. And Mrs. T mixers.
THE CHALLENGE
As the group’s business continued to grow, it found that its initial CRM application
purchased in the early 1990s was no longer being supported by the vendor and, in
fact, was used by only a small group of people. Instead, most groups had built
complex spreadsheets to track and forecast their business. On a monthly basis,
the spreadsheets would be consolidated so managers could have a view of sales
activity and pipeline forecasts. In 2005, the company decided to explore new CRM
options that would enable them to have less manual consolidation and greater
ongoing visibility into actual sales activities on an ongoing basis.
THE STRATEGY
Dr Pepper Snapple Group considered a number of vendors including SAP and
Salesforce.com and ultimately selected Salesforce.com for three main reasons:
Salesforce.com was more cost effective on both an initial and ongoing basis
Salesforce.com could deliver upgrades and enhancements without disrupting
users
A successful pilot showed Salesforce.com could support the company’s sales
tracking and reporting needs.
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September 2009
TOPICS
Customer Relationship
Management
Software as a Service
Document J66
In April 2006, the company started its implementation, training users in a 2-day
training course in May and June and running Salesforce.com side-by-side with its
other system in July to ensure there wouldn’t be any data migration issues or
discrepancies. By August 1, the group was using only Salesforce.com for all its
sales forecasting and reporting activities.
KEY BENEFIT AREAS
Moving to Salesforce.com has enabled Dr Pepper Snapple Group to streamline its
data entry and sales forecasting and reporting operations, enabling both greater
visibility and greater productivity. Key benefits from the solution include:
Increased manager productivity. Managers save a day a week because sales
information is available to them at their fingertips when they need to make
decisions.
Reduced report consolidation time. One employee who used to spend 10 days
per month compiling sales information for management has now been
redeployed to other activities.
Reduced report consolidation time. Individual sales people can now keep all
their sales information in one place, reducing the amount required for them to
submit their sales forecasts each month.
Faster budgeting and forecasting. Ready access to information enables
managers to make faster budgeting and forecasting decisions and instead
focus on leveraging the data to identify new strategic sales growth
opportunities.
Greater visibility. Now sales professionals and managers can rapidly access
real-time information about sales performance by account, sector, and product,
and rapidly identify opportunities for improvement.
BENEFITS
Direct
21%
Indirect
79%
TOTAL: $982,897
KEY COST AREAS
Key cost areas for the project included software, personnel, consulting, and
training. The company also made some investment in travel to provide users with
in-person group training.
© 2009 Nucleus Research, Inc. Reproduction in whole or part without written permission is prohibited.
Nucleus Research is the leading provider of bottom line-focused technology research and advice.
www.NucleusResearch.com
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September 2009
Document J66
COSTS
Training
2%
Personnel
35%
Consulting
4%
Software
59%
TOTAL: $759,264
BEST PRACTICES
To ensure user adoption, Dr Pepper Snapple Group trained all users in person in a
2-day training session. It recognized that different users had a different level of
technology experience so some needed additional attention during the early
phases. It also started with just accounts and contact coverage and is now
enhancing the application with more detailed fields and information now that users
have learned the basics.
CALCULATING THE ROI
Nucleus quantified the initial and ongoing costs of software, consulting, personnel,
training, and other related costs over a 3-year period to quantify the total cost of
Dr Pepper Snapple Group’s investment in Salesforce.com.
Direct benefits quantified included the elimination of support and upgrade costs for
the company’s previous CRM application. Indirect benefits quantified included
productivity savings for managers, sales support people, and sales professionals
and were quantified based on the average annual fully loaded cost of employees
using a correction factor to account for the inefficient transfer of time between time
saved and additional time worked.
Nucleus Research is a global provider of investigative technology research and advisory services. Building on
its unique ROI case study approach, for nearly a decade Nucleus Research has delivered insight and analysis
on the true value of technology and strategies for maximizing current investments and exploiting new
technology opportunities. For more information or a list of services, visit NucleusResearch.com, call
+1-617-720-2000, or e-mail [email protected]
© 2009 Nucleus Research, Inc. Reproduction in whole or part without written permission is prohibited.
Nucleus Research is the leading provider of bottom line-focused technology research and advice.
www.NucleusResearch.com
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DETAILED FINANCIAL ANALYSIS
DR PEPPER SNAPPLE GROUP
SUMMARY
Project:
Salesforce.com
Annual return on investment (ROI)
56%
Payback period (years)
2.28
Average annual benefit
327,632
Average annual total cost of ownership
253,088
ANNUAL BENEFITS
Direct
Pre-start
0
Year 1
68,640
Year 2
68,640
Year 3
68,640
Indirect
0
258,184
259,101
259,692
Total Benefits Per Period
0
326,824
327,741
328,332
DEPRECIATED ASSETS
Pre-start
Year 1
Year 2
Year 3
Software
0
0
0
0
Hardware
0
0
0
0
Total Per Period
0
0
0
0
DEPRECIATION SCHEDULE
Pre-start
Year 1
Year 2
Year 3
Software
0
0
0
0
Hardware
0
0
0
0
Total Per Period
0
0
0
0
EXPENSED COSTS
Software
Hardware
Consulting
Pre-start
Year 1
Year 2
Year 3
127,500
127,500
194,100
0
0
0
0
0
27,400
0
0
0
158,000
57,000
30,500
18,000
Training
6,764
5,000
5,000
0
Other
2,500
0
0
0
322,164
189,500
229,600
18,000
Personnel
Total Per Period
FINANCIAL ANALYSIS
Pre-start
Net cash flow before taxes
(322,164)
137,324
98,141
310,332
Net cash flow after taxes
(161,082)
68,662
49,070
155,166
Annual ROI - direct and indirect benefits
Year 2
37%
56%
-38%
-44%
-24%
(161,082)
(101,376)
(64,272)
37,752
322,164
511,664
Payback (years)
Average annual cost of ownership
3-year IRR
Year 3
43%
Annual ROI - direct benefits only
Net present value (NPV)
Year 1
2.28
370,632
27%
253,088
27%
FINANCIAL ASSUMPTIONS
All government taxes
50%
Discount rate
15%
© 2009 Nucleus Research, Inc. Reproduction in whole or part without written permission is prohibited. All calculations are based on Nucleus
Research's independent analysis of the expected costs and benefits associated with the solution. www.NucleusResearch.com
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